After some discussion on IRC it was found out that the CDPATH environment variable was set which causes "cd debian/$pkg" to write the directory name to stdout which was then picked up by "xargs rm".
(Thanks to Jakub Wilk.)

This could be worked around by always using "cd whatever >/dev/null",

Better work-around is using "cd ./whatever", so that CDPATH is not taken into account at all.

--
Jakub Wilk

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